Why you Need Renters Insurance:

To Quote the movie The Big Short“People hate to think about bad things happening, so they always underestimate their likelihood”.  We couldn’t agree more, especially when it comes to personal risk and in this case Renters Insurance.  (As an aside, this movie is based upon the book by Michael Lewis, The Big Short: Inside the Doomsday Machine which we highly recommend reading.)

When it comes to personal risk, most people would like to delay or avoid thinking about what could happen – they normally live in the moment and focus on their family, children, jobs, home chores, etc…

Growing Renters Market

As we have detailed, our society is moving to a renters’ society.  Consumer behavior is changing.

Reversing the long uptrend in home-ownership, American households have increasingly turned to the rental market for their housing. Up from 31 percent in 2004, the renter share of all US households climbed to 35 percent in 2012, bringing the total number to 43 million by early 2013.

A high percentage of this 43 million are young adults, who haven’t had losses or don’t always understand how to avoid risks – so rental insurance is key for this group.

Renters Insurance Needs

Homeowners and Renters have different sets of responsibilities associated with their living space-and with it different risks.  But the main question you should ask is can I afford to pay for an accident to my property or someone on my property?   Or can I continue to afford rent after replacing all my belongings?

Your net worth is exposed if you don’t buy Renters Insurance…

Personal Exposure

Imagine returning from a relaxing vacation to find all of your possessions destroyed in a fire, hurricane or other catastrophe.

Your landlord’s insurance policy won’t cover you; it covers only the building repairs, not your personal belongings.  While your landlord may be sympathetic to a burglary or a fire caused by your iron, destruction or loss of your possessions is not usually covered by your landlord’s insurance.

Look around at all your possessions and get a quick estimate of their value, can you afford to write a check next week to replace all of them?

By purchasing renters insurance, your possessions are covered against losses from fire or smoke, lightning, vandalism, theft, explosion, windstorm and water damage (not including floods).

Like homeowners insurance, renters insurance also covers your liability to other people injured at your home or elsewhere by you, a family member or your pet and pays legal defense costs if you are taken to court.   You could be sued by a delivery man slipping and falling because of some condition you left in your hallway.

Renters insurance covers your additional living expenses if you are unable to live in your apartment because of a fire or other covered peril. Most policies will reimburse you the difference between your additional living expenses and your normal living expenses but still may set limits as to the amount they will pay. This is a cost that adds up quickly in the event that you may need to live elsewhere for long term apartment repair.


The average policy costs $188 per year, according to the Insurance Information Institute.

At this price we ask, can you afford not to buy Renters insurance?


This is a topic we will go in more detail about the policy, what is covered, what you need to know, and how to buy renters insurance.  Keep tuned for more details.

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Arnold Smith

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